Part 6: 07/15/2008 Doc 339
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7. “…Forensic accountant to investigate Altomare’s disposition of the many millions of dollars he obtained while at the helm of Universal Express.”
A suggestion for a forensic accounting was first raised by the Court during the May 7, 2008 telephone conference, and not the SEC. The Court’s words indicated the idea as a means of expediting not delaying satisfying the Court’s concerns as to the disposition of funds received from USXP and the potential for a source or sources of funds other than from USXP. As of this filing the SEC has not said that it in fact engaged a forensic accountant. As late as June 20, 2008, SEC was undecided as to which financial analyst to engage. (DX-37; DX-38).[29]
[29] Noteworthy: DX-38, dated June 20, 2008 included a letter dated May 19, 2008 from one of the forensic accountants whose fees ranged from a low of $35,000.00 to a high of $55,000.00. Equally noteworthy is Altomare’s notice to SEC counsel of his financial inability to share in the costs dated May 23, 2008. (First motion for relief, attachment 10). In addition, the suggested protocol discussed between SEC counsel and the forensic specialist included verifying purchase price structure for the Bocaire residence and the Toscano condominium as well as their current market value. That portion of the suggested protocol is wasteful, given the Court’s previously articulated judicial notice of the depressed Florida real estate market and common knowledge that the real estate market nationwide is all but dead. (DX-52). Any real estate broker in Palm Beach County was and is qualified to printout comparable sales prices of residences in the Bocaire community and comparable Highlands Beach, Florida hi-rise condominium units which would have confirmed the testimony already provided by Altomare during the February 4, 2008 hearing: that the market price range of the Toscano condominium is substantially depressed from its purchase price. The Court correctly, quickly concluded the Bocaire residence is “under water” in comparison to the unpaid balances owed on the two mortgages encumbering it.
Altomare should not be punished by continued incarceration while the SEC dallies, especially in view of the overwhelming showing he has made evidencing his inability to pay and the sources of the bank deposits exclusively including (i) USXP, (ii) the two home equity lines of credit (“helocs”) and (iii) checks drawn against his charge card accounts.
V.
Altomare Has Satisfied His Burden; And The SEC Continues to Distract the Court From the Very Narrow Issue at Bar, Namely Altomare’s Current Inability to Pay All or Any More of the Disgorgement Judgment And Prejudgment Interest
A. Altomare Assets.[30]
[30] Henceforth this combined submission is organized in the exact format as that presented by the Commission to facilitate the Court’s reference.
1. Real Estate.
The SEC’s reference to the Bocaire residence and the Toscano condominium continues to distract the Court from its narrow focus on the single issue at bar: whether Altomare possesses the current ability to make payments or is unable to do so. The distraction emanates from the SEC’s suggesting that Altomare failed to produce any information to substantiate efforts to sell the condominium over recent months, his inability to recite the full name of the realtor handling the condominium listing, and Altomare’s failure to demonstrate “good faith efforts to sell the condominium.” None of the foregoing is accurate and none is relevant. In addition, the SEC did not ask for additional documentation since receiving 72 pages worth of sales listings and rental listings relating to the Toscano condominium, the full name of the broker agent which was first recited to the Court during the February 4, 2008 proceedings and contained on the various documents delivered on May 7, 2008.[31]
[31] At the risk of redundancy, the broker’s name is Vincent (Vinnie) Morea, his cellular telephone is 561-212-9933 and office, 561-750-0255.
It is also distracting because it is common knowledge throughout the nation that the real estate market literally is in “the tank,” as previously noticed by the Court. Moreover, rhetorically, counsel for Altomare must ask: what possible relevance does it have to this Court’s factual determination regarding present ability to pay that Altomare could not remember the full name of the realtor during his day long deposition under the conditions previously, undeniably described to the Court.[32] In like fashion, Altomares’ delinquent payments on the mortgage obligations for the residence and the condominium, now are beyond up-dating. But the SEC likewise could have requested updates on a continuing basis, something it again failed to do. Finally, that the properties were not in foreclosure as of the June 26, 2008 deposition (Tr. at 79-80), is now corrected by updated information: one or both are on the verge of foreclosure. (DX-51, DX-53).[33]
The SEC’s criticism of Altomare’s failure to articulate the precise source for the $100,000.00 earnest money deposit reflected on line 201 of the Toscano condominium settlement sheet (Depo. Exhibit 2), has been answered by counsel’s subsequent investigation. (See ¶19 and n. 10, ante; DX-45; RAA-2387-88.) In addition, the art, as such, owned by Altomare was identified in his answers to interrogatories (second set) in the possession of the SEC since June 18, 2008. (DX-60). The one watch [32] which was purchased by Mrs. Altomare and given to Altomare as a gift in 2006 (depo at 100-102), has been addressed ante. It is in my possession and subject to my attorney’s retaining lien as collateral for very substantial, unpaid legal fees due and owing.
[32] Additionally, if the SEC wanted continuous updates of efforts to sell the condominium to be reported and not undertaken on its own initiative, it merely had to ask. It would be unfair to Altomare and abusive of this Court’s vast powers and discretion to require Altomare to be clairvoyant.
[33] Given the current financial circumstances the SEC does not have long to wait for delivery of formal notice of commencement of foreclosure.
The audiovisual equipment and furnishings in the condominium must be addressed separately. The furnishings were and are in the condominium in the hopes of marketing or renting the condo at a maximum price despite the extremely depressed real estate market. (DX-52). The rental market ended in April for all intent and purposes until October. While the furnishings can be sold off if the Court so wishes, since all net revenues from the sale of the condo have been pledged to the Court, the equipment is subject to two mechanic’s liens filed in May, 2008, all as confirmed by the title history to the condominium delivered to the SEC on June 16, 2008. (DX-50; RAA-2094 through 2142, especially 2096.)[34]
[34] The title search conducted by Attorney’s Title Insurance Fund, Inc., previously identified, recorded as encumbrance number 4, “Claim of Lien against Toscana West Condominium Association, Inc., by Engineered Control Systems, Inc.,” as recorded in O.R. Book 22535, Page 551, public records of Palm Beach County, Florida. The lien is in the amount of $8,771.12 plus accrued interest. (RAA-2131). An additional mechanic’s lien in favor of Benchmark Building & Design, Inc., in the amount of $28,443.04, plus accrued interest at 18% per annum also is recorded as an encumbrance against the condominium at O.R. Book 22450, Page 154 (RAA-2130).
As of July 8, 2008 there is also a condo association statutory lien encumbering the title. (DX-___, RAA-_____). Moreover, the SEC has exhaustively explored Altomare’s current assets through the first and second set of interrogatories and his deposition.
In essence it has been informed there are no other assets other than those identified previously; no income other than from USXP; no sources of deposits into Altomare bank accounts other than USXP (until 8/24/07), the two helocs and the liquidation of the jewelry, and cash draws against various credit cards. All action attempting to liquidate that which he owned exclusively and not in the form of a tenancy-by-the-entirety with his wife has been identified and the one remaining asset worth talking about, his wristwatch, (retailed at $12,000.00 plus now probably worth $6,000.00 plus or minus used), is subject to my attorney’s retaining lien. Other jointly owned assets are not subject to the disgorgement judgment other than the condominium in which Mrs. Altomare has affirmatively of record waived her tenancy by the entirety ownership rights. Therefore, to say to this Court that “Altomare has taken no steps to identify to the Court or the SEC his current assets and the steps he has taken to liquidate those assets in order to satisfy all or any portion of the Court’s “disgorgement judgment”, (second submission at 3, section 2) misinforms the Court. Equally misinformative is the SEC’s recent assertion that Altomare “has not provided any records to corroborate his claim (that the $10,000.00 payment to Steinway Piano Gallery on June 18, 2007) was lost when he failed to complete the transaction. The SEC never requested additional documents to corroborate the assertion, and could have subpoenaed Steinway Piano Gallery for its records and knowledgeable witness relating to the transaction. Two things for certain: no Steinway or other piano appears in either the Bocaire residence or the condominium and the SEC has not come forth with contradicting evidence. It merely criticizes Altomare for what in essence is a lack of clairvoyance.
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07/15/2008 339 RESPONSE in Opposition re: 191 MOTION for Sanctions and Entry of Contempt against Universal Express, Altomare and Gunderson. Response to Plaintiff's Second Submission on Issue of Contempt and Second Motion for Relief from Contempt. Document filed by Richard A. Altomare. (Tifford, Arthur) (Entered: 07/15/2008) |
